Commentary by Stephen MacMackin, Chair of Atlantica Centre for Energy
This commentary first appeared in Saltwire on Thursday, January 18, 2024. It has been shared with the author’s permission.
Atlantic Canada is no stranger to high intensity weather events, which are becoming more common and recovery, more expensive. Just like homes and businesses, the region’s energy systems must become more resilient in anticipation of continued climate disruption.
The electrical grid and energy infrastructure must also prepare by adopting cleaner fuels and technologies. The Atlantic region has a diverse energy system but also some of the toughest (and most expensive) obstacles to overcome to reach net zero targets such as the replacement of coal and major infrastructure refurbishment required in the next decade. And, like every other region across Canada, affordability in tackling these challenges will be a significant barrier.
Every Atlantic Canadian is experiencing cost increases in virtually every aspect of their lives. From the price of groceries to anticipated increases in electricity bills, residents and businesses are feeling the pinch.
In 2023, some progress was made to build a more robust energy system including; the announcement of a modified Atlantic Loop; direction was given on how to replace coal-fired generation; legislation progressed to enable hydrogen projects; decisions on major hydrogen export opportunities were made; the beginning of an offshore wind industry was put into motion; and new solar and wind projects were brought online. Furthermore, the Government of New Brunswick released a new strategy for energy, Nova Scotia published a Clean Power Plan, PEI gathered feedback to develop a new energy strategy, and Nova Scotia Power and NB Power released update Integrated Resource Plans.
While the Atlantic provinces and utilities are actively developing plans and policies to prepare the energy sector for a net-zero future, the federal government has continued to implement sweeping policies to influence how energy is generated, moved and consumed across Canada.
The Atlantica Centre for Energy is an advocate for all energy projects, indiscriminate of the technologies or fuels used. The Centre understand the energy sector plays a critical role in supporting Atlantic Canada’s economy but is concerned one important factor is missing in many of these provincial announcements: industry investment. This is worrisome, but not surprising: businesses need confidence to invest.
Many pundits and recent media coverage points to the uncertainty around federal climate policies. If the federal government changes within the next 22 months, will these policies change with it? Will they be tweaked, or dropped entirely? The energy sector seems to be on the path to becoming a divisive voting issue, more than at any time in recent history.
There is a pressing question regarding whether businesses will be confident enough to justify hundreds of millions of dollars invested in Atlantic Canada in the short-term.
Decarbonizing Atlantic Canada’s energy sector will require billions invested to meet net-zero emissions commitments by 2050 (2040 in Prince Edward Island). These investments are in addition to potential projects to export clean energy such as hydrogen.
Businesses don’t just decide whether to invest in a project; they decide where to deploy their capital – often Canada isn’t the only country under consideration, let alone Atlantic Canada. The region must remain a competitive, attractive jurisdiction during the energy transition, both for companies in the energy sector, and for those reliant on it.
A longstanding issue with federal policies is a one-size-fits-all approach often only fits the provinces with the greatest populations. The implications for Atlantic Canada then become secondary; this is especially true when looking at recent federal policies and regulations aimed at reducing emissions. Carbon taxes, the Clean Fuel Regulations, and the incoming Clean Electricity Regulations, among others, all produce greater costs for end-users in Atlantic Canada than in most other provinces.
The concern is, under a cloud of partisan politics, policies that the public deems unaffordable, could be kicked to the side entirely when governments inevitably change. This is already happening with the carbon tax. Will it happen with the Clean Electricity Regulations, oil and gas sector emissions cap, or other policies too?
There must be a solution.
The Atlantica Centre for Energy has responded to nearly all federal policy feedback requests with a call to create policies that fit the geographic, demographic and economic realities of each province.
The Centre supports setting ambitious emission reduction targets for provinces, but allowing each province to decide how to most effectively and affordability reach these goals.
The Centre also supports the federal government continuing to focus on financial tools, incentives and investments to encourage new technologies and helping maintain competitiveness with other jurisdictions.
By offering more control and flexibility to provincial governments, energy policies could be developed through a lens with a less partisan approach, which can offer Atlantic Canadian businesses more confidence to make investments.
Provincial governments have demonstrated both a forward-looking approach and a collaborative mindset with energy policy decisions in 2023.
2024 will be a pivotal year for Atlantic Canada’s energy transition if some of the ‘politics’ can be removed to allow businesses to invest in our region.
About the Atlantica Centre for Energy
Atlantica Centre for Energy provides a unique meeting ground for industry, government, the education and research sectors, and the community at large to foster partnerships and proactively engage in energy-related issues. As the voice for energy in the region, the Centre’s membership represents some of the largest employers, energy producers, distributors, and consumers in the region.